Ladies and gentlemen, thank you for standing by, and welcome to Avery Dennison’s Earnings Conference Call for the Third Quarter Ended on October 2, 2021. The operator provided instructions. This call is being recorded and will be available for replay from noon Pacific Time today through midnight Pacific Time, October 30th. To access the replay, please dial 1-800-633-8284. For international callers, please dial 402-977-9140. The conference ID number is 21969421. I would now like to turn the conference over to John Eble, Avery Dennison’s Head of Investor Relations. Please go ahead, sir.

Thank you. Please note that throughout today’s discussion, we’ll be making references to non-GAAP financial measures. The non-GAAP measures that we use are defined, qualified and reconciled with GAAP on schedules A4 to A10 of the financial statements accompanying today’s earnings release. We remind you that we’ll make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These forward-looking statements are made subject to the safe harbor statement included in today’s earnings release. On the call today are Mitch Butier, Chairman, President and Chief Executive Officer; and Greg Lovins, Senior Vice President and Chief Financial Officer. I’ll now turn the call over to Mitch.

Thanks, John, and good day, everyone. I’m pleased to report we delivered another strong quarter. Our two primary businesses achieved impressive top and bottom line growth, and momentum in our Intelligent Labels platform continues. We are in a higher demand environment that comes at a time of continued and increasing challenges. The ramping up of COVID infections and restrictions in some countries, continued supply chain challenges and additional inflationary pressures are impacting the industry, our customers and our teams. The biggest challenges have been in LGM North America due to raw material shortages and labor and capacity constraints and in RBIS Vietnam, where output was significantly constrained in the quarter due to COVID restrictions. While we are encouraged by recent trends in these businesses as we’ve been able to increase output in recent weeks, the supply chain constraints continue. As for inflation, the pressures continue to increase. We previously expected some abatement in raw material input costs towards the end of the year whereas we now expect additional inflation in Q4 as well as Q1 of next year. Now, for context on the magnitude of the inflation, in our materials businesses alone, we will be exiting this year with annualized inflation of more than $600 million. That’s a nearly 20% increase, a rate we have not seen in decades. We are thus in the midst of another round of price increases. Despite these hurdles, we continue to achieve impressive results. The team is doing a tremendous job managing through these compounding challenges, focusing on keeping our teams safe and delivering for our customers. Now, a brief recap of the segments. Label and Graphic Materials posted strong top line growth for the quarter, overcoming the challenges I just highlighted, as demand for consumer packaged goods and e-commerce trends continue to drive strong volume growth in our Label and Packaging Materials business, while growth in our Graphics and Reflective Solutions business continues to rebound. LGM’s profitability remained strong, though margins were down from last year due to the increasing inflationary headwinds and higher cost in the quarter from the supply chain constraints. Given the increasing inflationary pressures, we have redoubled our efforts on material reengineering and, as I mentioned previously, are raising prices again. Retail Branding and Information Solutions delivered strong revenue growth in the quarter and continued to expand margins significantly. The segment grew 22% on a constant currency basis and 14% organically, driven by strength in both, high-value product categories as well as the core apparel business. Impressive performance is despite the significant constraint in South Asia, where we have major manufacturing hubs, once again demonstrating the advantages of our global manufacturing network. Intelligent Labels sales, enterprise-wide, were up 15% in the quarter, and we are on track for approximately 30% organic growth for the year versus 2020 and 40% versus 2019, towards the higher end of our long-term target. As expected, the continued strong growth in our RFID business was primarily driven by apparel. Applications outside of apparel, particularly food and logistics, grew faster than the average, though obviously off of a small base. And in Q3, we also closed the acquisition of Vestcom, a business that further expands our position in high-value categories and has the potential to further advance our Intelligent Labels strategy. In the Industrial and Healthcare Materials segment, sales continued to rebound off prior year lows and were up relative to 2019 by 11% on a constant currency basis. As for margins, they are down as inflationary pressures and costs from supply chain disruptions have impacted the segment to a greater degree than LGM. Overall, I am pleased with the progress we’re making as a company on our long-term strategies while also executing in the near term. We are providing superior service to our customers despite the challenging environment, keeping our teams safe and engaged, ramping up investments for the long term and ensuring we continue to deliver for our shareholders. Given our strong performance in the quarter, we have raised our outlook for the year, now anticipating earnings growth of roughly 25% over last year’s record and are on track to achieve all of our five-year company-wide goals that we established in early 2017. With that, I’ll now hand it over to Greg.

Thanks, Mitch, and hello, everybody. We delivered another strong quarter with adjusted earnings per share of $2.14, up 12% over prior year and up 29% compared to 2019, driven by significant revenue growth and strong margins. Sales were up 17% ex-currency and 14% on an organic basis compared to prior year, driven by strong volume across the portfolio and higher prices. We also delivered strong growth compared to 2019, with organic sales up 10% versus two years ago. As Mitch mentioned, our supply chains remain tight and input costs have continued to rise. Both raw material and freight inflation were above our expectations for the quarter, and we’ve continued into the fourth quarter. We continue to address the cost increases through a combination of product reengineering and pricing and have announced additional price increases in most of our businesses and regions across the world. Despite the impact of inflation, supply chain disruptions and the headwind of last year’s temporary cost reduction actions, we delivered a strong adjusted EBITDA margin of 15.4%, down 70 basis points from last year and up 120 basis points compared to 2019. Turning to cash generation and allocation. Year-to-date, we’ve generated $639 million of free cash flow, up over $251 million in the third quarter. That’s up significantly compared to previous years, driven by our strong net income growth and working capital productivity. And we closed the Vestcom acquisition in the quarter for a total purchase price of roughly $1.45 billion. To fund the acquisition, we used the net proceeds from an $800 million senior note offering in August, along with cash and commercial paper. Additionally, in the first three quarters of the year, we returned a total of $290 million in cash to shareholders, through $164 million in dividends and the repurchase of over 700,000 shares at an aggregate cost of $126 million. Our balance sheet continues to be strong with a net debt to adjusted EBITDA ratio of 2.3 at quarter end, at the bottom end of our long-term target leverage range. This gives us significant capacity to continue the disciplined execution of our capital allocation strategy. Now, turning to the segment results. Label and Graphic Materials sales were up 15% ex-currency and 14% on an organic basis, driven by strong volume and roughly 5 points from higher prices. Compared to 2019, sales were up 11% on an organic basis. Label and Packaging Materials sales were up roughly 15% organically, with strong volume growth in both, the high-value product categories and the base business. Graphics and Reflective sales were up 11% organically. And looking at the segment’s organic sales growth in the quarter by region, North America sales were up low double digits despite raw material availability challenges that have continued to create extended lead times. Western Europe grew more than 20%, partially due to easier comps given the impact of the pandemic we saw in Q3 last year. With that said, the business was still up double digits versus 2019. And overall, emerging market sales were up low double digits in the quarter with double-digit growth in both, ASEAN and Latin America and mid-single-digit growth in China. While LGM’s profitability remained strong, adjusted EBITDA margin decreased from last year to 15.9%. This was partially driven by the increased inflationary pressures and the impact of supply constraints, which led to some incremental costs in the quarter such as expedited freight and overtime to minimize disruptions to customers. And as you know, our goals are to deliver GDP-plus growth and top quartile returns on capital with a focus on driving EVA. Our approach to price increases and material reengineering is designed to do just that as we look to offset higher material costs on a dollar basis by the end of an inflationary cycle. However, the revenue base from such price increases alone, especially at the magnitude we are seeing in the back half of this year, reduces operating margin on a percentage basis with no impact to returns. This pricing impact led to a reduction in operating margin by roughly 0.75-point in the third quarter. Shifting now to Retail Branding and Information Solutions. RBIS sales were up 22% ex-currency and 14% on an organic basis, as growth remains strong in both, the high-value categories and the base business, due in part to lower prior year comps. Compared to 2019, organic growth was up 9%. The apparel business saw a particular strength in the performance and premium channels and continued double-digit growth in external embellishments. As Mitch mentioned, Intelligent Labels sales were up organically, roughly 15% and up about 40% compared to 2019. Adjusted operating margin for the segment increased to 13.8% as the benefits from higher volume and productivity more than offset the headwind from prior year temporary cost reduction actions, higher employee-related costs and growth investments. The RBIS team is continuing to deliver in this high-growth, high-margin business. Turning to the Industrial and Healthcare Materials segment. Sales increased 20% ex-currency and 15% on an organic basis, reflecting strong growth in both, the industrial and healthcare categories. Compared to 2019, sales were up 6% on an organic basis. Adjusted operating margin decreased to roughly 10%, as the benefit from higher volume was more than offset by the net impact of pricing, higher freight and raw material costs and higher employee-related costs. Freight, in particular, had an outsized impact on IHM in the quarter, given the significant increases in global shipping costs. Now, shifting to our outlook for 2021. We have raised our guidance for adjusted earnings per share to be between $8.80 and $8.95, a roughly $0.08 increase to the midpoint of the range. And we now anticipate roughly 15% organic sales growth for the full year, at the high end of our previous range, reflecting strong volume growth and the impact from higher prices. We’ve outlined some of the key contributing factors to this guidance on slide 12 of our supplemental presentation materials. In particular, the impact of the extra week in the fourth quarter of 2020 and the resulting calendar shift will be a headwind to reported sales growth of roughly 8 points in the fourth quarter this year with a roughly $0.30 EPS headwind. The anticipated tailwind from currency translation is now $30 million in operating income for the full year, based on current rates. Most of this benefit came in the first half and will thus create a headwind as we go into 2022, if rates stay where they are now. And we expect a modest EPS benefit from Vestcom in 2021, net of purchase accounting amortization, which we estimate to be nearly $60 million on an annualized basis and net of financing costs. We continue to target over $700 million of free cash flow this year, up significantly from previous years. In summary, we delivered another strong quarter in a challenging environment, and we remain on track to deliver on our long-term objectives to achieve GDP-plus growth and top quartile returns on capital, which together drives sustained growth in EVA. We will now open up the call for your questions.

Thank you. The operator provided instructions. Our first question is from Ghansham Panjabi with Robert W. Baird & Company. Please go ahead.

I guess starting with RBIS and some of the production issues, a lot of your customers have talked about on the consumer side in Vietnam and just Southeast Asia more broadly. How are you sort of able to navigate through that dynamic? Do you start to see sort of a flex across your different production footprints, et cetera, as order flow moved? Or just more insight on that dynamic would be helpful.

Yes, absolutely, Ghansham. So, it’s exactly what you just said. So, it was Vietnam that’s getting a lot of the press and headlines and definitely had the biggest impact. But throughout the pandemic, there’s actually been different regions that have been impacted more than others, and we’ve been flexing the global manufacturing network to help offset that. Specifically here, if you’re asking about Vietnam, we are able to leverage China to be able to service that demand from Vietnam. Still, it impacted growth by a couple of points overall. The question is how much of that is just end demand that won’t happen now because the retailers and apparel brand owners won’t be able to fulfill more end consumer demand or not. But it had an impact of a couple of points is what we estimate, and it would have been larger than that had we not sourced from China.

Got it. And then, just for my second question on inflation. Inflation has been building all year for many different supply chains, including yours. I guess what surprised you incrementally over the past three months, which specific categories and which regions are you seeing the most inflation? And also, did 3Q benefit from any sort of material pre-buy as customers kind of positioned for these incremental inflations? Thanks.

Yes. Thanks, Ghansham. Overall, I think we’ve seen inflation continue to increase really across the category. I don’t think it’s zeroed in on one particular place. We’ve seen chemicals, adhesives, the film and resin components continue to increase. And then, in the third quarter, as we expected, we started to see some increase in paper, particularly in Europe. So, we’ve seen the acceleration in the third quarter and into the fourth quarter really across the different component categories. I think the biggest regions where we’re seeing the largest inflation are North America and Europe. North America really started late last year with some of the chemical increases, and that’s continued to grow as we move through this year and then Europe continued shortly after that with paper really kicking in here in the third quarter. It’s been the biggest sequential increase. As far as pre-buys on your question, we didn’t really detect much pre-buying in Q3 ahead of Q4. We did accelerate and get a bit more benefit from pricing in the quarter purely because we accelerated some actions there. Looking into Q4, it’s hard to get a good read on the quarter because of the price increases we’ve announced in some regions for November 1, which is causing some pre-buys in October, but it doesn’t have any inter-quarter movements, if you will, Ghansham.

Our next question is from Anthony Pettinari with Citigroup. Please go ahead.

Is there a way to think about the timeline for possibly rebalancing price cost in LGM based on the commodity inflation you’re seeing and the pricing actions you’ve taken? And then, understanding the market is extremely dynamic and it’s tough to say, is there anything that you could say about how your LGM market share position has maybe fared in the current environment?

Yes. On your first question, Anthony, I think a quarter ago our communication view was that we thought by the end of the year we’d be looking to close the price-inflation gap essentially, and we’ve continued to see accelerated inflation. So, we’re looking at somewhere kind of low to mid-single-digit further inflation from Q3 to Q4. And now, we’re implementing additional pricing actions. I think our view is that it takes us a few months, 3 to 4 months, to pass pricing or reengineer some materials to take cost out to manage the inflation. So, when we start to see inflation stabilize 3 or 4 months after that is probably when we expect to be able to cover that on an ongoing basis.

And from your market share question, overall, markets remain relatively strong in North America and Europe, and from a share perspective things are pretty stable. We don’t have share data yet on the most recent period. We think it’s relatively flat in some regions and up sequentially in other regions just stable. Specifically, in North America, we’ve called out in the past that we’ve seen some sequential improvement, we believe, but we’re not quite where we want to be yet. We expect we will be there in the next couple of quarters.

Okay. That’s helpful. And then, is it possible to specify either the financial or the volume impact of the North American labor issues that you referenced? Are those primarily with a group of customers or within Avery? And do those kind of linger in 4Q? Are they better or worse exiting October versus what you saw in 3Q?

It’s more about the ability to meet surges in demand. The ability to flex when demand suddenly spikes. So, it’s primarily impacted our service lead times which are consistent with what we’re seeing across the industry—lead times being longer than they usually are, which is what the whole industry is seeing. That’s the main driver. We’ve got a bigger backlog. We don’t know how much of that is true end demand versus maybe inventory building or people getting into queue just to make sure they’ve gotten allocation of future manufacturing. Overall, the key message here is the markets remain healthy with good growth in the end markets, particularly in North America and Europe. So, the gains that the market achieved last year when the pandemic first hit have been held and then we’re seeing incremental growth from there. And yes, it’s putting a bit of a strain on the lead times across the industry.

Our next question is from George Staphos with Bank of America Securities. Please go ahead.

First question I wanted to ask is around what you’re doing to offset inflation. Good companies play to their strengths and advantages during periods of stress to gain position, to gain share. As you think about LGM versus RBIS and you think about the broad buckets—reengineering and cost versus commercial and price versus new products and innovation—how would you say that mix varies in terms of how you’re behaving in the market, LGM versus RBIS? And then the second question related to it is, is there a horizon, is there a practical limit where you really can’t do any further reformulation where the incremental benefit isn’t what we’ve been seeing this year and in prior years, which would mean that you’d have to raise pricing further? And is there a practical limit in terms of how much more pricing you can get before you would worry about the strong demand? Thank you, guys.

Sure, George. So, the inflation is much larger in LGM. Our levers within all of our businesses are relentless focus on productivity—focusing on variable costs, innovating material reengineering and restructuring. Material reengineering is more to do within the materials businesses, as you’d expect. You asked, are there limits to that within a given time period. Yes, there are some limits in the short cycle, but over the long horizon we continue to have a pretty consistent ability to deliver material cost out; we’ve been doing that for decades. So, I don’t see a long-term limit to that, but definitely in the short term there are constraints that then cause you to move to pricing. Within RBIS, they’re having some inflation as well, not nearly the magnitude that we’re seeing within materials. And there, we’ve been raising prices as well. It’s a different impact because every program is different in the apparel industry and you’re constantly repricing for new programs. Lastly, restructuring has been a consistent focus of ours. We accelerated a lot of restructuring into last year, and so we’re in a position of strength now. When you’re in a high-volume environment, that’s when you normally taper back some restructuring. Long term, these are key levers for us across the portfolio, but clearly we accelerated some actions in the last year.

Just on the pricing side, is there a point at which you’d start to worry about pressure-sensitive materials being replaced by something else in the market? Does there come a point where your customers can’t bear any further pricing?

No, the pricing pressure is broad-based, not industry-specific. Regardless of labeling solutions, inflation is broad-based and even outside packaging materials. The cost of packaging is relatively small versus the overall cost of the packaged goods. So, generally, the macro environment—rising inflation and labor constraints—actually heightens the need for information solutions labels, whether classic barcode labels or RFID and intelligent labels. We think it further increases the business case for many of the solutions we focus on and invest in.

Our next question is from John McNulty with BMO. Please go ahead.

On the Intelligent Label front, admittedly the 15% that you hit is kind of in your long-term range of 15% to 20%. But admittedly, it’s a bit lower than I think what we were expecting just based on a bunch of channel checks throughout the industry. Anything constraining your ability to deliver in terms of volumes in the Intelligent Label side that we should be thinking about?

Each quarter you’ll have movement up and down within that range. Year-to-date and for the full year, we’re looking at growth of about 30% for the full year, which compounds to roughly 18% annually versus the 15% to 20% goal—at the higher end of that range. Specifically, we were constrained by the South Asia challenges—Vietnam impacted RBIS overall and thus Intelligent Labels by a couple of points. Also in Malaysia in the middle of the quarter we had lockdowns that affected one of our RFID inlay manufacturing plants. So, there were constraints but overall we feel good about where we are, how we’re trending and how the pipeline is developing.

Got it. And then on the free cash flow front, you’ve already generated a huge amount so far—around $632 million. Q4 is normally a big quarter for you in terms of free cash. Should we be thinking about it differently given raw material inflation and things like that, or can Q4 still be the big quarter it normally is?

A couple of points. CapEx year-to-date is a bit lower than we would have expected coming into the year. For the full year, we’re still probably around our initial expectations, but given supply chain challenges and some things getting delayed from an equipment and building perspective, we expect to have more CapEx in Q4—probably more relative to the first three quarters than what we normally would have. Overall, we’ve got about $630 million year-to-date and our target is to deliver over $700 million. We’re very confident in that and that’s about $150 million more than last year, which was a record free cash flow year for us. So, we feel very good about the trajectory and our ability to continue driving strong free cash flow.

Our next question is from Josh Spector with UBS Securities. Please go ahead.

In the third quarter, you did a really good job holding margins flat sequentially in spite of what you earlier called out as high single-digit raws inflation quarter-to-quarter. What was the biggest factor that helped you achieve that in the third quarter? Also, your guidance for fourth quarter reflects about a 50 basis-point sequential margin decline. What’s different about the fourth quarter versus last quarter?

Part of the overall flatness Q2 to Q3 was driven by the strengthening of RBIS from Q2 to Q3. In the materials businesses we saw more of the sequential inflation in Q3 where there was a little bit of sequential decline Q2 to Q3. For Q3 to Q4, we expect to continue delivering strong margins in RBIS. We did talk about further sequential inflation that we’re now working through passing prices through, so that creates a little bit more of a gap in the fourth quarter than we would have expected before.

Thanks. And on the RFID side, UPS specifically talked about more RFID adoption in their parcels. Can you comment if that’s a project you’re involved with? Can you size that opportunity for the North America parcel market if adoption increases? Does this change any of your views about medium-term adoption where retail remains the biggest opportunity?

We’re working with all major logistics players, and while I won’t comment on any specific program, we do have a number of programs and pilots targeted at areas where automation needs are highest. Logistics-related applications are growing faster than apparel off a small base, and these technologies—RFID and broader intelligent label solutions—are key enablers for companies seeking automation, cost reduction and speed improvements. If you look at the number of parcels that move, the market opportunity can be very large as more companies adopt these solutions.

Our next question is from Jeff Zekauskas with JP Morgan. Please go ahead.

In your slides you talk about $600 million of annualized inflation. But you also say that for the year your annual inflation is about 10%. If $600 million is 20%, then 10% is $300 million. Are your prices up that much, or are you in the hole by, say, $50 million or $70 million in raw material costs this year? Can you size that?

Directionally, you’re right. When we look at pricing, in the third quarter in LGM specifically (and IGM broadly), we had about 5 points of price in Q3 as part of the LGM growth rate. In the fourth quarter, we expect that to be a little bit higher year-over-year as we’ve been implementing prices in the third quarter and some new increases that take effect in Q4. So, yes, we still have a gap between price and inflation from a margin perspective overall, but pricing percentage continues to grow as we move through the year.

Propylene has already fallen and polyethylene may be down a few cents a pound in October. What you said is you thought inflation would be not only higher in the fourth quarter but in the first quarter of ‘22. Why would it be higher in Q1 '22 as a base case?

I’m talking sequentially. You’ve seen things progress such that exiting Q3 and entering Q4 creates a little bit of incremental impact that can extend into early Q1. It’s the timing and flow of inflation through inventory and the P&L.

Part of it is inventory timing: when inflation hits our purchases it can take time—often a month or more—to flow through into the P&L. Also, our view on how quickly commodity prices moderate has proved uncertain; a quarter ago we expected some abatement that didn’t materialize. We tend to look out a few months, evaluate capacity additions and macro factors, and remain cautious about making longer-term assumptions right now.

What raw materials are you short? What can’t you get?

It depends on the region and the specific business. Challenges have been seen on certain chemicals that go into our films and adhesives depending on the region. It’s not that we haven’t been able to get them for an extended period, but delays of a week or a few days can create operational challenges that require overtime or other actions. Paper liners in Europe have been a more recent challenge as well. There hasn’t been one persistent shortage; different areas have impacted us for short periods across the year.

To add, it’s not just supplier availability; there are lots of delays in the freight industry. Items can be held up at cross-dock facilities or take longer to move between countries, which in itself can cause meaningful delays. Sometimes that’s a day or two, sometimes it’s a week or more, and it requires shifting assets or other actions to manage through the situation.

Our next question is from Paretosh Misra with Berenberg Capital. Please go ahead.

On slide 10, where you show product mixes within RBIS, how should we think of the mix within Vestcom relative to this pie chart? Is Vestcom a totally new category or does it have some overlap with your existing portfolio?

We’ll lay out more detail on the next earnings call. Overall, Vestcom will be a new category within the portfolio, and the majority of it is in high-value categories while the rest will be part of the base business.

Any other color on your RFID pipeline—where it stands versus the start of the year?

We continue to see good momentum in the RFID pipeline. Our focus is on moving opportunities further down the funnel into local and regional rollouts. There’s activity in food, quick service restaurants and a number of pilots moving to broader rollouts. Logistics is another area showing activity. We’re also seeing multi-category retailers exploring RFID beyond apparel into other departments. Broadly, food and logistics are areas with strong growth consistent with the opportunities we discussed at our Investor Day in March.

Our next question is from Chris Kapsch with Loop Capital. Please go ahead.

Focused on LGM and the comments about organic growth by region, could you provide more color as to why Western Europe would be up more than 20% versus low double digits in North America and emerging markets? I don’t think it has anything to do with more pronounced inflation there. Any explanation for the divergence in trends?

Some of it is just easy comps. Last year in Europe we were declining in the third quarter after a surge in the second quarter due to the pandemic. So much of the strong year-on-year performance is driven by easier comps. When you look over a two-year period, Europe is up about 10% from 2019 to 2021 Q3.

You’re still above the historical growth rate for that region, so it’s healthy markets, but there can be quarter-to-quarter gyrations.

Has the supply chain logistical challenges that have restrained growth in RBIS been the case in any instances in different regions in LGM?

It’s primarily LGM North America that’s been most impacted within LGM. For RBIS, constraints have been driven by Vietnam and Malaysia COVID-related restrictions. LGM Asia has also been impacted; freight remains a global challenge, particularly moving product around Asia and between countries, which affects LGM in Asia as well.

Our next question is a follow-up from George Staphos with Bank of America. Please go ahead.

A quick detail question: you said something about $60 million related to Vestcom—what was that related to again? And a question on capital allocation: could you remind us of your appetite and ability to do M&A within the LGM sector? In periods of stress, big companies often gain capabilities and share—are there companies in the pipeline attractive to you from a value-add standpoint and would you be willing and able to buy in LGM? Thanks.

The $55 million to $60 million range I referenced was purchase accounting amortization for Vestcom that we expect for 2022. When you include ongoing depreciation and amortization, total D&A including Vestcom next year is probably in the $70-ish million range for that business overall.

We continue to have an M&A pipeline and are actively working it with partners in the industry. We’re focused disproportionately on high-value categories and capabilities that accelerate our strategy—areas that add brand and information solutions or value-add material science product categories. We’re continuing to look and engage, and we have the capacity to deploy capital after the Vestcom acquisition. We feel good about the early results of Vestcom and confident in achieving a good return there.

Would it be fair to say that the high-value focus is more likely to be met in RBIS broadly, or is that an oversimplification?

It’s not that one segment is more important; the emphasis is on moving up the value chain across the portfolio—information and branding solutions as well as value-add material science product categories. Both LGM and RBIS have base materials and higher-value product sets, so it’s about where we can increase the high-value proportion of the total portfolio.

Mr. Butier, there are no further questions at this time. I will now turn the call back to you for any closing remarks.

All right. Well, thank you everybody for joining. We had another strong performance in a very challenging period. I want to once again thank our entire team for their ongoing efforts to keep one another safe while continuing to deliver for our shareholders and our customers. Thank you very much.

Ladies and gentlemen, that does conclude the conference call for today. We thank you all for your participation and ask that you please disconnect your lines. Have a great day, everyone.